So what are we to make of this bull market, which sits near
5-year highs?
Citi's Tobias Levkovich warns that sentiment may be
reaching dangerously high levels. "The Panic/Euphoria Model has
spiked to near its highs over the past three years, suggesting
frothy levels have ensued," writes Citi's Tobias Levkovich.
"While a variety of other factors are constructive for equity
indices, this proprietary gauge is starting to get perilously
close to euphoria, cutting above the complacency readings seen
in April/May 2012. In the past, when the model reached such
levels, the equity markets experienced some modest
consolidation."

Veteran hedge fund manager Felix Zulauf is also worried. He's
particularly concerned about the lack of sell-offs in this bull
run. "If the markets do not correct as I expect some time
in spring, if the markets would continue to go up, and not be
confirmed by internal technicals, then it gets very, very
dangerous," said
Zulauf in an interview with King World News. "Then we would
resemble much more a market situation that has some
similarities to 1987 ... I’m just saying we are in dangerous
territory, and people should be aware of that and take
precautionary steps."